Crypto analysts have been using various on-chain metrics and indicators to determine whether the Bitcoin top has already been reached in this bull run. One analyst, Thomas, has pointed to the dominance of USDT as a key factor in predicting Bitcoin’s market top.
Thomas stated in a post on X (formerly Twitter) that USDT dominance has accurately predicted every local top for Bitcoin over the past six years. He emphasized that each time USDT dominance touches the bottom of a trendline, there has been a clear local top for Bitcoin. By following this metric, traders would have been able to sell at the top in previous cycles.
According to Thomas, it is logical to use USDT’s dominance to predict Bitcoin’s top because the trend of USDT-D over a longer period should be positive due to coin distribution occurring gradually. He highlighted the significance of USDT-D in the market, as it is influenced by the movement of stablecoins in and out of the market.
Additionally, Thomas noted that USDT dominance can also be used inversely to predict the local bottom for Bitcoin. He explained that this method has been successful in predicting every local bottom during previous bear markets, although it may not provide an exact estimate of the bottom, it can offer a ballpark figure.
Based on the chart shared by Thomas, it appears that Bitcoin’s local top may have already been reached, as USDT.D has once again touched the trendline mentioned by the analyst. When asked if this meant Bitcoin was heading for new lows, Thomas clarified that the market could bounce back up and test the lower end of the USDT.D chart, similar to the last bull run.
The analyst expressed optimism that this scenario would occur, suggesting that the market would retest the support line multiple times over the coming months, allowing Bitcoin more room to grow in this cycle before reaching its peak. Other analysts, such as Rekt Capital, have also indicated that the cycle top has not yet been reached, with historical trends pointing towards a peak sometime next year.
Thomas revealed his plan to use the USDT.D trendline to guide his longer-term trades in BTC/ETH, buying when USDT dominance is at the top of the trendline and selling when it reaches the bottom. As of the time of writing, Bitcoin is trading at around $56,400, with a 4% increase in the last 24 hours.
In conclusion, the dominance of USDT has proven to be a valuable indicator in predicting both the top and bottom of Bitcoin’s market cycles. By analyzing this metric, traders can make informed decisions about their trades and potentially capitalize on market trends.
